TechniTrader Education "Understanding Momentum Run Action" by Martha Stokes CMT

How to Use MetaStock Indicators During Momentum Price Action for Higher Profits


Most Retail Traders exit runs too early, losing most of their profits from a Momentum Run. Indicators that reveal weakening or stronger patterns in runs, can help Traders hold during brief episodes of resting days or mild profit taking, allowing for much higher Return On Investment for that trade.


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Two MetaStock indicators that help Traders during a Momentum Run are the TechniTrader Volume Accumulation TTVA Indicator and the TechniTrader Flow of Funds TTFF Indicator.

The TechniTrader Volume Accumulation TTVA Indicator is a center line Volume Oscillator, and is shown in the middle chart window of the example chart below. It is designed to show when Dark Pool accumulation starts, as well as when the run is starting to lose momentum energy before profit taking or reversal.

The TechniTrader Flow of Funds TTFF Indicator is shown in the bottom chart window of the example chart below and provides additional information as to how much activity is coming from the giant Buy Side Institutions, as opposed to just Retail Traders or Independent Investors.

The combination of these two indicators helps Swing Traders make better hold and exit decisions resulting in lower risk, less stress, and higher profits for each trade. 

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When a Trader can increase the profits of every trade made it increases their monthly income, reduces the risk of choosing weaker stock picks just to have something to trade, and helps to gain confidence while developing the skills of trading.

Regardless of which MetaStock trading system or strategy you employ to find stocks to trade, finalizing the selection using Leading Hybrid Indicators will dramatically reduce weak trades that net losses, and will increase profits with stronger picks that run more points. 

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The chart example below shows a very common Momentum Run action.

 example showing a common momentum run action - technitrader

This is due to Dark Pool Quiet Accumulation going on by the giant Institutions, which is hidden from those trading on the Exchanges, Electronic Communication Networks, and other venues. When giant Institutions accumulate they are removing vast quantities of liquidity aka stocks available from the market, and this in turn creates the Momentum Runs out of a bottom low.

In the chart example see the first long green arrow indicating where the TechniTrader Volume Accumulation TTVA Indicator signaled early that a Dark Pool Buy Zone™ was triggered, and then the stock drops to its final low. By knowing in advance that Dark Pools have commenced accumulation even while the stock makes a lower low, allows Swing Traders to prepare for the sudden upside Momentum Runs that follow.

The TechniTrader Flow of Funds TTFF Indicator tells the Trader that this is a few giant Buy Side Institutions bargain hunting to invest funds, and that Smaller Funds are not yet aware of their giant lot buying on the Dark Pool Alternative Trading System venues. The stock bolts upward when Professional Traders discover the accumulation, barely pausing at the initial Dark Pool Buy Zone.

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It then continues to run up into resistance before profit taking occurs, which stalls price but does not cause a major price collapse. Runs of this type can be very lucrative for a Technical Trader who understands the dynamics behind this price action. Learning to use Accumulation, Large Lot, and Flow of Funds Indicators is crucial to successful Swing Trading. 

Summary

Price patterns are important, but what is even more critical to track is WHEN and WHERE the giant Buy Side Institutions who control trillions of assets, start their bargain hunting buying activity.

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Trade Wisely,

Martha Stokes CMT


TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock


Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

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